Turk social security
ANKARA (Reuters) – The Turkish Parliament is not expected to pass a key social security reform package soon, as demanded by the IMF under a loan pact, after opposition parties said yesterday they needed time to work on it. Labor Minister Murat Basesglioglu added to the concerns that the reform would be late – it is already delayed from last year – by saying that it could take five months to push through Parliament even though the government holds a majority of seats. «If the negotiations are carried out at their normal time, this means (it will take) 20 weeks, that is five months,» Basesgioglu told reporters in Parliament. The IMF’s review of Turkey’s economic program and the next loan tranche – part of the country’s return from a deep 2001 financial crisis – are on hold until the government can show it has made significant progress on pushing the reform through. The social security package has sparked strong labor opposition because the government first suggested raising the retirement age to 68 from the current 58 to 60. The government later lowered this to 65. Opposition parties say the package needs to be looked at again and have accused Prime Minister Recep Tayyip Erdogan’s government of acting hastily under IMF pressure. Performance reviews of the $10 billion standby accord were delayed last year due to hold-ups in structural reforms, including social security. The reform, which aims to trim Turkey’s large social security deficit through more efficient management and raising the retirement age, has yet to come to the parliament floor for debate. «The bills have just been printed today. We need time to examine it before such an inclusive regulation is debated in Parliament,» a senior official from the main opposition CHP told Reuters. Though the goverment has a majority in Parliament the opposition has the power to slow the legislative process through questions and calls for more debate. No room for delay Erdogan told his party group in Parliament that the package was «one of the greatest» reform attempts in the history of the Turkish republic. «This reform has no room for further delays. The social security deficit has hit 4.5 percent of the gross national product. We want this law to be passed as soon as possible,» Erdogan said. The labor minister said that the ruling Justice and Development Party (AKP) was willing to start discussions today on one of the bills in the package which unifies Turkey’s separate social security institutions under one roof. This bill is seen as less controversial compared with the pension bill which raises the retirement age to 65. The package introduces universal health insurance, but also aims to cut costs by making savings on drugs procurement and tighter spending constraints on hospitals. It will also develop a monitoring system for health expenditure to ensure that costs remains under control. The government has been seeking opposition parties’ backing to speedily enact the legislation so the third review of the IMF standby deal can start. «The summer season is approaching. The Parliament should pass this before the start of summer recess,» said Cengiz Kilic from Demir Life Insurance. He said a delay with reforms would be seen as a bigger risk factor later in the year by the financial markets than now. Investors fear that a yawning current account deficit and a possible collision between Turkey and the European Union over membership conditions already pose significant risks for the Turkish economy in the coming months. If the reform is not passed before the summer it will be tougher for the government to push it through in the fall as by then it will be gearing up to campaign for elections due in 2007.
